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Delta capacity utilisation declines

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Listed beverage producer, Delta Beverages, is currently operating at between 40% and 60% of its capacity due to a decline in demand for its products witnessed since 2013, an official has said.

BY MTHANDAZO NYONI

In emailed responses to NewsDay, company secretary, Alex Makamure said the company has recorded significant declines in its volumes and subsequently revenue performance since 2013 as a result of the imploding economy.

“This is in line with the general downturn of the economy. As an example, our lager beer volume for the half year to September 2016 was 36% down on same period in 2013; soft drinks are down 18%. The volume trends reflect the current capacity utilisation of 40 to 60%,” he said.

“We employ about 4 200 permanent and 600 contract — total 4 800 employees. This is down from around 5 500 in 2013.”
Makamure said the company’s strategy for this year is to survive the bad patch and remain connected to their consumers.

On venturing into new projects this year, he said there are no specific new projects and the company will focus on normal replacements.

The company has been reporting losses due to a decline in consumer spending, which has been affected by the limited access to cash, a poor agricultural season and the generally weak macro-economic performance.

Its revenue for the half year ended September 2016 declined by 8% to $246,6 million on prior year as most of its segments recorded lower volumes on the back of depressed consumer spending.

Lager beer volume was down 11% on prior year as demand shifted to traditional beer and other cheaper alcohol offerings while volumes for sparkling beverages dropped by 3%.

However, sorghum beer volumes increased by 6% on prior year, while contributing 60% to total revenue.

Operating income was down 9% to $39,4 million and earnings before interest, tax depreciation and amortisation was 8% lower at $54,9 million, reflecting lower revenues.

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